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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

a crook story « Previous | |Next »
May 27, 2006

There is an essay in the weekend Australian Financial Review by Clive Crook, a journalist for National Journal that takes a big swing at J.K. Galbraith. Crook's charges against Galbraith are poor scholarship, being a central planner and advocacy of socialism.

Crook's judgement is that Galbraith compares very poorly with Milton Friedman in the intellectual grunt stakes. That judgerment is undermined by the claim that Hayek's 'Road to Serfdom' tract is up with Keynes' 'General Theory', whilst Galbraith's 'The Affluent Society' is up there with 'The Earth is Flat.' That indicates the trashy nature of the article.

For another example, consider this passage:

Much of the left still longs to sneer at the very idea of capitalism, especially at the claim that it has real ethical foundations (all the more so in comparison with the attempted alternatives).There is still a wish to regard the whole thing as a scam: gulled and witless consumers; scheming and rapacious businesses; phony markets and bogus "competition"; politicians, media hacks and other assorted apologists for "the system" all cosily in the pockets of the people in charge. It is a comprehensively false diagnosis.

It's a straw dog argument, given the acceptance of capitalism by social democracy for over a century. The welfare state is about social justice and the failures of the market, not the replacement of capitalism with socialism. The American and Australian left has called for the regulation of capitalism so that it serves the needs of people better.

And the content of 'ethical foundations of capitalism' are not even mentioned. What are they? Justice? Utility? Freedom to choose? Negative liberty? Autonomy? Trust or social capital? Personal responsibility? Efficiency? Private property? Ascetic Protestantism? Survival? Individual rights? The intrinsic value of the market, as an ethical justification? These foundations for the moral basis of the free market are not one and the same are they? We have deontological accounts (the intrinsic moral superiority of autonomy and freedom (in the market), and consequentionalist ones.

Presumably, the ethical foundations need to be consistent with the Homo Oeconomicus model, which assumes that agents are simply self-interest-maximizing beings deploying an instrumental reason. On that model desires trumps reason. Presumably the ethical foundations also need to be consistent with the conception of the economy as a clockwork mechanism.

Saying, along with Milton Friedman, that capitalism nurtures individual freedom, is different to the ethical foundations talk. The latter implies that free markets are necessary for individual liberty. How then is individual liberty grounded? Do liberty and economic rules reside in nature?

Since pure economic rationality does not take persons and other institutional structures into account, and if economics is not value-free, and the institutional structure of capitalism is not value-free, then economic ethics cannot uncritically accept capitalism and economics as foundational givens.

Why the appeal to foundations and not ethos? Foundations implies bedrock as natural and not historically evolved, doesn't it. Capitalism is not natural. It's a historical mode of production. Though the market is a spontaneous order, is not a natural datum, but an artifact, albeit a very complex artifact as it is the non-intentional fruit of actions brought into being by the actions of self-interest-maximizing beings capable of reflection and of choice. ont hsi account decentralised planning by a multitude of individuals making free economic decisions produces better results in regard to a more organized, efficient, and productive economy, than does a centrally-planned economy.

| Posted by Gary Sauer-Thompson at 4:33 PM | | Comments (4)


"Those of the left still long to sneer at capitalism". Umm very strange, still long to sneer? Well I sneer at it every waking minute. In fact not only do I sneer, sometimes I laugh, other times I'm amazed, have been known to shed a tear, but mostly I love to hate the bastards (CAPITALISTS) with every fibre of my being.

At the end of the day what are they these capitalists? Well most of them are lying, cheating, dis-honest, lazy, un-caring, bastards, who like to get rich usually but not always by the sweat of another mans brow. Who killed more indians than John Wayne? Union Carbide. A joke no less. I could go on, but to give a true account of the misery they have caused and are causing to this planet,would take me a life time to type.

So capitalism is socially acceptable ,so true, or could it be we are basicaly all greedy bastards and the only issue to be worked out is by what degree. Like my old man used to tell me, plenty of booze to pickle the working man's brains, and footy on the weekends and bullshit will baffle brains any day of the week. Geez I'm so working class and common.

Oh before you hang me out to dry, any of you flat earthers, or as I like to call you wing nuts. I used to run my own business and employ people.
Geez luise a traitor to his own kind.

The American, British and Australian social democratic left has primarily called for the regulation of capitalism so that it serves the needs of people better. They have done this through building the welfare state, which is about social justice and the failures of the market,not the replacement of capitalism with socialism.

Gary ,could you please illustrate further by what you mean "failure of the market" I would have thought we have had, and yes even under John Howard, record growth and profits,and the government drowning in a surplus?

However this money is not being spent by the government on any social causes but on election advertising and anything. I firmly believe and hence my last burst re capitalists is that, John Howard et al would destroy the welfare state and wind back history a hundred years in one term of government, if they thought they could get away with it.

That they are destroying the social welfare system now slowly by stealth, only a simpleton could not see.The way he used reverse psychology by be-friending the workers with his battlers mantra,and appealing to the racist attitudes were classics. I will always pay compliments where they are due and the Howard government have pulled off the greatest scam on the working class since this country was founded.

Zeno of Citium himself would have trouble working out the thought processes of our present conservatives.You know the funny thing is like anyone, I know heaps of people who hate these bastards with a passion,and would never admit to voting for them. But when they get in the privacy of that polling booth and pull that curtain across, the rest as they say is history.Phill

examples of what I mean by the "failure of the market"is climate change partly caused by greenhouse emissions from coal fired stations.

Intervention by the government is required to address the negative consequences from economic growth fueled from coal.

Another example is the way economic reform by the Hawke/Keating Government had the consequence of creating massive unemployment in the manufacturing sector. That failure gave rise to One Nation and the socially conservative working class going over to John Howard and staying there.